Alon USA Partners Reports First Quarter Results

Contacts:

Claire Hart, Senior Vice President

Alon USA Partners GP, LLC     
972-367-3649

Investors: Jack Lascar/ Sheila Stuewe

Dennard • Lascar Associates, LLC 713-529-6600
Media: Blake Lewis

Lewis Public Relations

214-635-3020

Ruth Sheetrit

SMG Public Relations

011-972-547-555551

- Tables to follow -

ALON USA PARTNERS, LP AND SUBSIDIARIES CONSOLIDATED

EARNINGS RELEASE

RESULTS OF OPERATIONS - FINANCIAL DATA

(ALL INFORMATION IN THIS PRESS RELEASE EXCEPT FOR BALANCE SHEET DATA AS OF DECEMBER 31, 2012, IS UNAUDITED)

For the Three Months Ended

March 31,

2013

2012

Predecessor (B)

(dollars in thousands, except per unit data)

STATEMENTS OF OPERATIONS DATA: (A)

Net sales (1)

$

804,167

$

884,274

Operating costs and expenses:

Cost of sales

650,203

787,894

Direct operating expenses

30,422

22,670

Selling, general and administrative expenses

7,665

3,845

Depreciation and amortization

12,064

11,966

Total operating costs and expenses

700,354

826,375

Operating income

103,813

57,899

Interest expense

(9,392)

(5,074)

Interest expense - related parties

—

(4,267)

Other income, net

4

21

Income before state income tax expense

94,425

48,579

State income tax expense

900

503

Net income

$

93,525

$

48,076

Earnings per unit

$

1.50

Weighted average common units outstanding (in thousands)

62,501

CASH FLOW DATA:

Net cash provided by (used in):

Operating activities

$

166,646

$

43,475

Investing activities

(6,719)

(7,281)

Financing activities

(35,456)

(136,181)

OTHER DATA:

Adjusted EBITDA (2)

$

115,881

$

69,886

Capital expenditures

2,941

5,222

Capital expenditures for turnaround and chemical catalyst

3,778

2,059

KEY OPERATING STATISTICS:

Per barrel of throughput:

Refinery operating margin (3)

$

28.76

$

15.24

Refinery direct operating expense (4)

5.68

3.58

PRICING STATISTICS:

Crack spreads (per barrel):

Gulf Coast 3-2-1 (5)

$

28.40

$

24.78

WTI crude oil (per barrel)

$

94.27

$

103.00

Crude oil differentials (per barrel):

WTI less WTS (6)

$

11.41

$

2.16

Product price (dollars per gallon):

Gulf Coast unleaded gasoline

$

2.84

$

2.98

Gulf Coast ultra-low sulfur diesel

3.09

3.16

Natural gas (per MMBtu)

3.48

2.50

March 31,
2013

December 31,
2012

BALANCE SHEET DATA (end of period):

Cash and cash equivalents

$

190,472

$

66,001

Working capital

68,564

1,702

Total assets

878,344

763,423

Total debt

295,810

295,311

Total equity

239,625

181,726

THROUGHPUT AND PRODUCTION DATA:

For the Three Months Ended

March 31,

2013

2012

Predecessor

bpd

%

bpd

%

Refinery throughput:

WTS crude

45,220

76.0

55,546

79.9

WTI crude

11,549

19.4

12,206

17.6

Blendstocks

2,707

4.6

1,760

2.5

Total refinery throughput (7)

59,476

100.0

69,512

100.0

Refinery production:

Gasoline

29,785

50.4

35,140

50.7

Diesel/jet

19,298

32.6

22,236

32.1

Asphalt

3,359

5.7

4,535

6.6

Petrochemicals

3,726

6.3

4,136

6.0

Other

2,969

5.0

3,187

4.6

Total refinery production (8)

59,137

100.0

69,234

100.0

Refinery utilization (9)

92.4

%

96.8

%

(A)

Earnings per unit information is not presented for the three months ended March 31, 2012 as there was no common equity or potential common equity publicly traded during that period and therefore is not required by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") topic 260, Earnings per share.

(B)

The information presented contains the unaudited combined financial results of Alon USA Partners, LP Predecessor ("Predecessor"), our predecessor for accounting purposes, for the three months ended March 31, 2012.

(1)

Includes sales to related parties of $141,899 and $150,563 for the three months ended March 31, 2013 and 2012, respectively.

(2)

Adjusted EBITDA represents earnings before state income tax expense, interest expense, depreciation and amortization, and gain on disposition of assets. Adjusted EBITDA is not a recognized measurement under GAAP; however, the amounts included in Adjusted EBITDA are derived from amounts included in our consolidated financial statements. Our management believes that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. In addition, our management believes that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of Adjusted EBITDA generally eliminates the effects of state income tax expense, interest expense, gain on disposition of assets and the accounting effects of capital expenditures and acquisitions, items that may vary for different companies for reasons unrelated to overall operating performance.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
• Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our debt;
• Adjusted EBITDA does not reflect changes in or cash requirements for our working capital needs; and
• Our calculation of Adjusted EBITDA may differ from EBITDA calculations of other companies in our industry, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.

The following table reconciles net income to Adjusted EBITDA for the three months ended March 31, 2013 and 2012, respectively:

For the Three Months Ended

March 31,

2013

2012

Predecessor

(dollars in thousands)

Net income

$

93,525

$

48,076

State income tax expense

900

503

Interest expense

9,392

5,074

Interest expense - related parties

—

4,267

Depreciation and amortization

12,064

11,966

Adjusted EBITDA

$

115,881

$

69,886

(3)

Refinery operating margin is a per barrel measurement calculated by dividing the margin between net sales and cost of sales by the refinery's throughput volumes. Industry-wide refining results are driven and measured by the margins between refined product prices and the prices for crude oil, which are referred to as crack spreads. We compare our refinery operating margin to these crack spreads to assess our operating performance relative to other participants in our industry.

(4)

Refinery direct operating expense is a per barrel measurement calculated by dividing direct operating expenses by total throughput volumes.

(5)

We compare our refinery operating margin to the Gulf Coast 3/2/1 crack spread. A 3/2/1 crack spread is calculated assuming that three barrels of a benchmark crude oil are converted, or cracked, into two barrels of gasoline and one barrel of diesel. We calculate the Gulf Coast 3/2/1 crack spread using the market values of Gulf Coast conventional gasoline and ultra-low sulfur diesel and the market value of WTI, a light, sweet crude oil.

(6)

The WTI/WTS, or sweet/sour, spread represents the differential between the average value per barrel of WTI crude oil and the average value per barrel of WTS crude oil.

(7)

Total refinery throughput represents the total barrels per day of crude oil and blendstock inputs in the refinery production process.

(8)

Total refinery production represents the barrels per day of various refined products produced from processing crude and other refinery feedstocks through the crude units and other conversion units.

(9)

Refinery utilization represents average daily crude oil throughput divided by crude oil capacity, excluding planned periods of downtime for maintenance and turnarounds.